How GoDaddy plans to become a real tech company for real people

Walking up Pine Avenue in Long Beach and spotting a throng of oiled-up bodybuilders in short shorts, the last thing I should have expected was a serious discussion about the plight of mom-and-pop business owners in the era of Amazon.com and Yelp. But these weren’t just any bodybuilders. They represented something bigger — in meaning, if not in size.

The bodybuilders are part of GoDaddy’s annual Super Bowl commercial. In years past, the ads have become infamous — heavily viewed, but criticized for their arguably distasteful sexual imagery and seeming disconnect from the company’s stable of domain-registration and web hosting services. They were part of an overall corporate image that just didn’t sit well with a lot of people, and a business model ripe for a kick in the pants.

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Sure, massive men in cutoff shorts can be visually shocking and, the company hopes, a bit funny, but no one unzipped anything in front of the camera. There was no supermodel making out with a nerd. And after all the cutoff jean shorts and pectoral muscles were gone, there I was: sitting in a trailer with GoDaddy CEO Blake Irving, talking about his mission to remake GoDaddy from the ground up and to empower the world’s 600 million (by his estimate) small businesses with a new class of web services.

“What we’re trying to do,” Irving said, “it’s a noble cause.”

A handful of dozens of bodybuilders that will ultimately storm the building. Source: Derrick Harris

GoDaddy’s numbers impressed Irving, and brought him to the job. GoDaddy has approximately 12 million users, more than $1 billion in annual revenue and 64 percent of its customers are likely to recommend the company to others. That was the foundation, but big future growth for GoDaddy means it needs big growth in its user base. The company’s average revenue per user is only $125 (with about a $45 acquisition cost) and only 500,000 users spend more than $500 a year.

The idea is to tap the world’s small businesses for that future growth. By official counts there are 28 million small businesses in the United States, Irving explained, but about 44 million if you expand that definition to include people who just have an idea — someone who is, say, just selling baked goods at the farmers market as a hobby. Worldwide, the number of “very small businesses” (GoDaddy’s preferred term for its customer base) could be closer to 600 million — and GoDaddy plans to be available in 30 languages and 60 new markets by the end of 2014.

“I’m thinking, if I could actually inject really good product discipline into the company … what could this be?” Irving told me during the interview in December. Now, it’s becoming clear: A place where aspiring entrepreneurs can get “a real simple way to get out of the shoebox and become a real business.”

Danica Patrick in her muscle suit. Source: Derrick Harris

Marketing (and machine learning) for the little guy

Which brings us back to the bodybuilders. This year’s Super Bowl ad isn’t just a cheap attempt to lure people to the GoDaddy website by hinting at scantily clad women, including spokesperson Danica Patrick. The premise is that a tanning salon is offering a great deal, which the city’s muscleheads discovered online. They’re storming the business trying to get in on the savings.

It’s an ad for GoDaddy’s newest product, Get Found, which is the fruit of the company’s Locu acquisition in August 2013. The product is focused on what Locu co-founder, now GoDaddy VP of product, Rene Reinsberg calls “discovery marketing,” but the moniker “Get Found” probably sums up the purpose a little better. It’s about making sure people know that small businesses exist in an era where online research precedes a larger percentage of visits to businesses.

Rene Reinsberg. Source: Derrick Harris

The product, which starts at $4.99 per month, uses machine learning algorithms to pull company information from store websites, menus and other documents. It then ensures that companies have accurate profiles on sites such as Yelp, TripAdvisor, Google, and other business databases and review sites.

Higher-priced versions let users add their menus or product lists, and even offer comparative analyses against similar businesses (another example of the machine learning expertise on which Locu was based). Reinsberg described how one Locu restaurant customer in San Francisco was killing its competitors in Sunday business, but then losing to them on Saturday nights — which also happened to be that business’s busiest night. So rather than focusing all its energy trying to win business on Sunday, it diverted some toward winning a bigger share of Saturday night.

“We want to give businesses insights that are tied to actionable info,” he said.

Irving extrapolates the promise of Get Found out to GoDaddy’s business as a whole: “Every time time data is added to that network, every time a new person is added to that network, it makes everyone in that network smarter.”

An example of how Get Found analyzes web presence. Source: GoDaddy

Staffing up from the web

But Get Found is just a sampling of what Irving says is in store for GoDaddy and its customers. He wants to personalize the experience for individual users and create a platform of services that’s more than a sum of its parts. He even wants to give new tools to website developers that, he acknowledges, aren’t among the company’s biggest fans right now.

In order to do this, Irving has brought in engineers and executives from companies like Google and Microsoft to help build GoDaddy into a platform company capable of delivering services like those larger companies do. New CTO Elissa Murphy was a Yahoo executive and early contributor to the Apache Hadoop project.

When Irving showed them the data and laid out his vision, they all said “This is gonna be insane,” he boasted. Insane in a good way. “Every person I have targeted to join the company, has joined the company,” he added.

Their mission is to build a global platform for GoDaddy that’s standardized across the network, storage, virtualization and data layers. “Where we will go is a common platform … so when we do a new service it’s based off of every other service we’ve built and put an API on top of it,” Irving explained.

He plans to utilize the latest and greatest in technologies and get involved in open source communities just like the larger web companies from which his new team have come. “It’s a lot of the same problems, just the scale’s a lot smaller,” Irving said, describing building platforms at places like Google versus at GoDaddy. “… [It’s] existing science as applied to a market that hasn’t been taken care of.”

Blake Irving. Source: GoDaddy

Long road for a rehaul

It sounds great, but it probably won’t be easy. A private company, GoDaddy doesn’t have the size or shareholder concerns of larger IT vendors like HP, Microsoft or IBM, but it might have some of the same struggles. It must ensure the new products get their just due compared with the legacy cash cows, and it must convince wary users and, potentially, investors that it’s really doing something new.

If it’s going to do that, it will have to tie all its new technologies into the cohesive platform that Irving describes. In fact, he acknowledged, that might be the most complex part of his GoDaddy overhaul.

“The price sensitivity for very small business is extremely high,” Irving admitted, so they won’t likely be paying for new services that don’t work — at least not for long.

But if the remake works as planned — if the pet store down the block can better compete against PetSmart or Amazon.com, or the local roofing expert working out of a home office can compete against Home Depot — GoDaddy stands come out looking like a hero, and to reap the financial rewards of that huge potential customer base Irving sees.

Tens, even hundreds of millions of very small businesses able to compete in a digital world could “shift the global GDP toward small business,” VP of Product Reinsberg said. “… It’s worth fighting for.”

I’m actually a big fan of GD, despite their over-zealous upselling and horrible User Interface, but Locu doesnt look much more than a Yext-type ‘me too’ service. Derrick, am i missing something or is this the case?